What is working capital and why does it matter?

Working capital is current assets minus current liabilities, representing the funds available for day-to-day operations. Positive working capital suggests a business can cover its near-term obligations; negative working capital can signal a cash crunch even for an otherwise profitable business.

What does a common-size balance sheet show?

It expresses every asset, liability, and equity line as a percentage of total assets, making it easy to see the structure of a business, how much is tied up in inventory versus cash, or how much is financed by debt versus equity, regardless of the company's absolute size.

Should total assets always equal total liabilities plus equity?

Yes, that's the fundamental accounting equation. This tool flags it if your entered figures don't balance, which usually means a line item was missed or entered incorrectly.

Does this tool store or send my balance sheet figures anywhere?

No, all calculations happen locally in your browser.

Balance Sheet Analyzer

Balance Sheet Analyzer - Free Tool for Working Capital & Common-Size Analysis

Enter your balance sheet figures to instantly see working capital and a common-size breakdown of assets, liabilities, and equity.

Assets

Cash & equivalents

Accounts receivable

Inventory

Other current assets

Fixed assets (net)

Liabilities & Equity

Accounts payable

Short-term debt

Other current liabilities

Long-term debt

Shareholders' equity

Total assets

Total liabilities

Working capital

Line item	Amount	% of total assets

Asset composition

Financing composition (liabilities vs equity)

How to use the balance sheet analyzer

Enter each asset line item: cash, receivables, inventory, other current assets, and fixed assets.
Enter each liability and equity line item: payables, short and long-term debt, other current liabilities, and equity.
Click Analyze Balance Sheet to see working capital and a full common-size percentage breakdown.
Check the balance warning, if assets don't equal liabilities plus equity, review your entries for a missing or misplaced figure.

Reading a common-size balance sheet

Expressing every line as a percentage of total assets strips away the effect of company size, letting you focus purely on structure. A business with 40% of assets tied up in inventory has a very different risk and liquidity profile than one with 40% in cash, even if their total assets are identical. Tracking these percentages over time also reveals whether a company is becoming more or less asset-heavy, or more or less reliant on debt financing.

Example

Total assets of 1,000,000 with 300,000 in cash and receivables against current liabilities of 230,000 gives working capital of 70,000, a modest but positive short-term cushion.

Frequently asked questions

What is working capital and why does it matter?: Current assets minus current liabilities; positive working capital suggests near-term obligations are covered.
What does a common-size balance sheet show?: Every line as a percentage of total assets, useful for comparing structure regardless of company size.
Should total assets always equal total liabilities plus equity?: Yes, that's the fundamental accounting equation; a mismatch usually means a missing or misentered figure.
Does this tool store or send my balance sheet figures anywhere?: No, all calculations happen locally in your browser.

Bookmark this page and re-run it every reporting period, tracking your common-size percentages over time reveals structural shifts long before they become urgent.

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